Question
In: Finance
Enter in excel formula You are considering the purchase of one of two machines used in...
Enter in excel formula
You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $95 initially, and then $140 per year in maintenance costs. Machine B costs $165 initially, has a life of three years, and requires $115 in annual maintenance costs. Either machine must be replaced at the end of its life with an equivalent machine. The discount rate is 12 percent and the tax rate is zero. Calculate the EAC. Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. EAC Machine A $ Machine B $ Which one should you choose? Machine A or Machine B
(In table below, row one is row 7 in assignment excel sheet . Tax rate is row 14)
Column C Column D
| Machine A life (years ) | 2 |
| Machine A initial cost | $95 |
| Machine A maintenance cost | $140 |
| Machine B life (years) | 3 |
| Machine B initial cost | $165 |
| Machine B maintenance cost | 115 |
| discount rate | 12% |
| tax rate | 0% |
Complete the following analysis. Do not hard code values in your calculation. Do not round intermediate calculations.
Column D Column E
| Years | Machine A CFs | Machine B CFs |
| 0 | ||
| 1 | ||
| 2 | ||
| 3 | ||
| 4 | ||
| 5 | ||
| 6 | ||
| 7 | ||
| 8 | ||
| 9 | ||
| 10 |
EACa
EACb
choice
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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